Who is Wilmer Ruperti?

Ruperti knows his market. Before 2002, he was a "tanker master", that is a ship captain who most probably was living on a meagre public servant's salary. Like other Venezuelan "entrepreneurs", Ruperti likes to pretend that he is some sort of tycoon, a criollo version of Aristotle Onassis. However, in a little known document from the Commercial Court of the Queen's Bench Division of England's High Court of Justice, Novoship UK Ltd v Wilmer Ruperty et al (Case No: 2006 FOLIO 1267), Ruperti provides as good as a yet-to-be-let-known explanation as to how, exactly, he became a "shipping magnate". Ruperti's knowing the market consists of a tried and tested formula: exploit contacts with key Venezuelan officials, keep them sweet, and see how your wealth mushrooms:

...the Russian ships were the ones who broke the naval blockade that took place in the country in December 2002. In a meeting at the Miraflores Palace with the military high command and then with Mr Ali Rodriguez Araque, and Mr Rafael Ramirez, I decided to break this blockade. At the time, I made it clear that the Russian fleet could succeed in breaking the blockade and they allowed me to charter, together with the chartering desk, all the vessels that I could . . . . the only drawback with the Russians was the way they guarantees payment of their freight and in a meeting at PDVSA, in their own offices, under the pseudonym of Captain Fausto, Mr Ali Rodriguez Araque and to the contingency authorized me to carry out the transaction... Wilmer Ruperti's email to Asdrubal Chavez, 24 November 2006.

Hence, as per Ruperti's own account, he was a mere ship broker in December 2002. The way he made his fortune is exhibit T of how utterly corrupt "businessmen" have exploited contacts at the highest levels in State-owned companies, such as PDVSA, to illegally reap immense profits. There's more:

174. When Venezuela was hit by severe strikes (in which staff of PDVSA participated) in December 2002 Mr Mikhaylyuk was instructed by Mr Izmaylov to provide as many ships as possible to enable the Venezuelan President to tackle the strike. He (Mr Izmaylov) said that Mr Frank (the then Minister of Transport) had asked Mr Izmaylov to provide this assistance and that Mr Frank, in turn, had been told that the request came from the top man in Russia (President Putin).

The way the scam worked was rather simple: Novoship UK Ltd would charter ships to Ruperti's companies, which in turn would charter the ships to PDVSA at a profit. Ruperti, in partnership with corrupt Novoship staff (Vladimir Mikhaylyuk), used an elaborate network of shell companies to dupe Novoship into thinking the company was dealing with PDVSA directly. The way Ruperti did this was quite blunt: he would use a $10,000 Panamanian company, called PDVSA Marketing International Trading (PMI Trading), in negotiations with Novoship. Both Ruperti and Mikhaylyuk knew that PDVSA Marketing International Trading, or PMI, was a shell owned and controlled by Ruperti, but that information was never passed to Novoship superiors. Having PDVSA in PDVSA Marketing International Trading's name seems to have been enough of an assurance for Novoship management, all relevant charter negotiations were conducted by Ruperti, as if he was PDVSA. Ruperti explains:

On December of 2002, there was a general strike in PDVSA (Oil Industry in Venezuela) which involved the immobilization of the vessels owned by PDVSA. In order to avoid disruption of Oil Supply, we started negotiations with NOVOSHIP to hire oil tankers to be employed with PDVSA. NOVOSHIP being a Russian Corporation and being Russia a friend Nation of Venezuela, NOVOSHIP accepted to employ the vessels but strongly requested that a company of our interests assumed the contractual obligations, specially the payment of hire. Accordingly, PMI TRADING INC and NOVOSHIP as agents for Owners of the vessels entered into time charters for the vessels Moscow Kremlin, Moscow Star and Marshal Chuykov.

Ruperti claimed, according to the court's document (point 168), that the President of PDVSA, Rafael Ramirez, was fully aware of the agreement between PDVSA, PMI Trading and Novoship, and that the reason for such an agreement was that "PDVSA finance/payment system" had been "shut down" during the strike. This argument beggars belief: how could a $10,000 shell company even be considered as a legitimate partner in negotiations of any nature in PDVSA's stead?

The little deal between Ruperti and Mikhaylyuk was discovered by Novoship management after communicating directly with PDVSA in November 2006. By then Ruperti had made some bribe payments into companies controlled by Mikhaylyuk:

- $217,100 to Mirador Shipping on 6 May 2003;

- $491,000 to Pulley Shipping on 4 May 2005;

- $500,000 to Pulley Shipping on 12 August 2005;

- $500,000 to Pulley Shipping on 3 November 2005;

In addition, presumably for "services rendered", Ruperti bought Mikhaylyuk's house in the UK for £375-385,000 in April 2004. Mikhaylyuk and his associate (Yuri Nikitin, whose activities are featured here) had managed to get producers in Russia's Ural region to employ Ruperti's broker services in relation to crude oil sales to Ruhr Oel, a subsidiary of PDVSA in Germany. Mr Nikitin got, through a vehicle called Amon International Inc., $37,383, $289,200, and $83,823.19 worth of bribe payments from Ruperti. Picture the delicious irony here: Ruperti's corruption gets found out by a Russian State owned company.

In point 411, the ruling establishes some $57,847,602.35 worth of damages to claimants. The document is a fascinating read. A specialized publication reported the proceedings "Justice Christopher Clarke awarded the Sovcomflot division damages of $169m before interest according to a judgement handed down in London this morning... Venezuelan Ruperti has been slapped with a $59.21m bill for damages and Mikhayluk $59.56m."

On November 7, 2007, the Honorable Robert W. Sweet, acting as Part I judge, signed an ex parte order of maritime attachment and garnishment authorizing the restraint of $17,149,420 of defendants' funds. Pursuant to the attachment order, plaintiffs were able to restrain $3,054,265.47. Defendants entered a special appearance and moved to vacate. Following a conference with the parties on December 14, an Order of December 17 was issued barring the restraint of additional funds pursuant to the November 7 Order pending briefing on a motion for a renewed order of attachment based upon an amended complaint. The motion was fully submitted on January 11, 2008. For the following reasons, the motion is granted and the November 7, 2007, order of maritime attachment and garnishment is reinstated in full.

Plaintiff Novoship (UK) Limited ("Novoship") is an English company that acted as agent and manager of the tanker vessels Marshal Chuykhov, Moscow Kremlin, and Moscow Stars (the "Tankers"), on behalf of the ships' owners, plaintiffs Cally Shipholdings, Inc., Vital Shipping Corporation, and Dainford Navigation Inc., respectively (the "Owners"), all Liberian companies headquartered at the same address in Monrovia. Defendant Wilmer Ruperti ("Ruperti") is a Venezuelan businessman who owns and controls defendants Sea Pioneer Shipping Corporation ("Sea Pioneer") and PMI Trading Inc. ("PMI"), both Panamanian corporations.

Plaintiffs allege that Ruperti, working with a "dishonest employee" of Novoship, Vladimir Mikhaylyuk ("Mikhaylyuk"), created falsified charter party contracts to fraudulently induce the Owners (via their agent, Novoship) to charter the Tankers to Sea Pioneer and PMI, which plaintiffs allege are merely Ruperti's "shell entities." This alleged scheme enabled Ruperti to gain control of the Tankers by leading Novoship to believe that the Tankers had been chartered directly to the official oil agency of the Venezuelan government, Petroleos de Venezuela S.A. ("PDVSA"), a major charterer of oil carrying vessels. In reality, plaintiffs allege, the Tankers were chartered to Sea Pioneer and PMI, who then sub-chartered the Tankers to PDVSA and "skimmed off the difference between what PDVSA paid to Ruperti's companies and what Novoship ultimately received. This difference, plaintiffs contend, amounted to more than $17 million.

The November 7, 2007, order of maritime attachment and garnishment is reinstated in full; plaintiffs are authorized to seek attachment of additional assets of the defendants found within this district, up to a total amount of $17,149,420.

The above provides quite the background. We know now that hagiography published by Lloyd's International about his businesses has no bearing in reality. His "Midas touch" nothing more than illegal deals with corrupt thugs that have allowed him to become the go-to guy for nearly all PDVSA-shipping needs. We now know that he had an active role in getting PDVSA to cut commercial ties with its former shipping partners, even before the 2002 strike. Such way of conducting business can hardly be defined as that of a "shipping tycoon".